 "Avoid trading in Nifty, Sensex bullish")
Special to Firstpost
S&P CNX Nifty (4888.05): While the index is still confined within the 4,720-5,170 range, it is positive to note that the crack witnessed in the early part of the week did not push the index below the 26 August low of 4,720. ( See chart )
The index appears to be building a base for the next major move. Though the rally on Friday is positive, only a breakout past the immediate resistance at 5,035 would lend momentum to the short-term uptrend.
As observed last week, the short-term trend remains bullish until 4,720 is not breached. Compulsive traders may consider long positions on weakness, with a stop at 4,700, for a target of 4,950.
While there is a case for considering long trades, it would be advisable to avoid trading in the Nifty until the recent spike in volatility subsides.
[caption id=“attachment_102253” align=“alignleft” width=“380” caption=“The BSE index managed to hold above the 26 August swing low of 15,765. Reuters”]
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BSE Sensex (16,232.54): It is positive to note that the index managed to hold above the 26 August swing low of 15,765. The short-term trend remains bullish and the index could rally to the immediate resistance at 16,750.
The index however has to move above the major resistance at 17,400 to lend momentum to the uptrend. A breakout past 17,450 could trigger rally to 18,400.
Axis Bank (Rs 1029.95): After a sharp correction, the stock appears to be gearing up for a short-term rally. A move to the immediate resistance at Rs 1,120 appears likely. Long position may be considered on weakness, with a stop loss at Rs 940, for a target of Rs 1,120. ( See chart )
A breakout past Rs 1,190 would indicate reversal of the recent downtrend and could trigger a rally to the major resistance at Rs 1,260.
Ranbaxy Laboratories (Rs 517.50): The recent recovery of the 29 August low of Rs 445 appears complete at the Friday’s high of Rs 530. Short positions may be considered on rally, with a stop loss at Rs 536, for a target of Rs 483.
A fall below Rs 466 would lend momentum to the downtrend and could trigger a slide to the major support at Rs 445.
(The views and recommendations featured in this column are based on the technical analysis of historical price action. There is a risk of loss in trading. The author may have positions and trading interest in the instruments featured in the column.)